An association of songwriters has hit out at Spotify, casting fresh doubt on the streaming service's capacity to generate income for musicians.

The British Academy of Songwriters, Composers and Authors (Basca), which represents 2,000 songwriters, claimed yesterday that the payments generated are "tiny" and called for the company to be more transparent about the nature of its business.

At the moment, Spotify does not disclose details of its deals with labels and publishers, and Basca chairman Patrick Rackow says this is leading to a climate of fear and distrust.

He told the BBC: "At the moment, the amounts of money that are actually being received are tiny. That might be because there is no money there. But there is no clear trail that can be established so that the songwriter can trace back what they ought to have got. These things are behind a blanket of secrecy, and that is extremely worrying.

"The danger is that these deals all become so secret that the mist that descends creates uncertainty, creates fear. That allied to the fact that the sums being paid through are very small creates a climate of suspicion. I think it harms Spotify, it harms the writers' perception of Spotify and this is a service they want to support."

The Swedish-owned company has been hailed in some quarters as a saviour of the music industry, offering users free streaming of a huge catalogue of music punctuated by short adverts. A monthly premium of £9.99 gets users uninterrupted access to the catalogue.

But last year it was claimed that over a five-month period, 1m plays of Lady Gaga's hit Poker Face – one of the most popular songs on the site – earned her just $167.

With record labels themselves owning a stake in Spotify, Rackow reckons that returns are "unlikely to filter down into payments to the artists". He continued: "It is pretty tough for the average successful songwriter to make a living. It is hard to say that anyone has a right to make a living out of writing songs but if you write songs that people actually want to hear then I think that does give you a right to get some renumeration back."

Spotify would not comment on the Basca claims, but has continued to insist that as more subscribers sign up and advertising revenue increases then that money will trickle down to the people who make the music.